TIDMFLK
RNS Number : 5510X
Fletcher King PLC
20 December 2019
FLETCHER KING PLC
Interim Results for the 6 months ended 31 October 2019
Financial Highlights
Turnover : GBP1,331,000 (2018: GBP1,465,000)
PBT : GBP108,000 (2018: GBP132,000)
Basic EPS : 0.90p per share (2018: 1.13p per share)
Dividend : 1.00p per share (2018: 1.00p per share)
Operational Highlights
-- Performance was lower than the comparative period last year
and continued to reflect the subdued property market associated
with uncertainties over Brexit and the UK political situation.
-- Steady and predictable revenue from asset management clients
provides ongoing support for the business along with a regular
supply of valuation instructions from lending banks.
-- A reasonable volume of sales instructions were completed in
the period but revenue from rating appeals remained lower than
normal due to the slow processing of appeals by the Valuation
Office Agency.
Commenting on the results David Fletcher, Chairman of Fletcher
King said:
"We had a reasonable first half and I am pleased that we are
able to report a profit, albeit at a lower level than previous
years, and to maintain our interim dividend at the same level as
last year. My year-end statement warned of the potential difficulty
in maintaining profitability in a volatile market and that
situation continues."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
ENQUIRIES:
Fletcher King Plc
David Fletcher
Tel: 020 7493 8400
Cairn Financial Advisers LLP (Nomad)
James Caithie / Tony Rawlinson
Tel: 020 7213 0880
The interim results are available on the Company's website:
www.fletcherking.co.uk
CHAIRMAN'S STATEMENT
Results
Turnover for the period was GBP1,331,000 (2018: GBP1,465,000)
with a profit before tax of GBP108,000 (2018: GBP132,000).
Your Directors have declared an interim dividend of 1.0p per
share (2018: 1.0p per share) to be paid on 14 February 2020 to
shareholders on the register at the close of business on 17 January
2020.
The Commercial Property Market
The first half of the year was dominated by the uncertainties
over Brexit and the UK political situation with sales and lettings
severely impacted as both tenants and buyers understandably held
back on decision making. During the period, investment into
commercial property was at a five year low and continued to
decline. The situation was graphically illustrated by M&G
suspending redemptions in their GBP2.5 billion property fund due to
an inability to sell enough property to satisfy investor
withdrawals.
The one bright spot in the market was the City office market
where demand for large spaces outstrips supply and rents have been
rising.
Business Overview
In my year end statement I warned of the potential difficulty in
maintaining profitability in such a volatile market. I am therefore
very pleased that we are able to report a profit in the first half
of the year albeit at a lower level than previous years and to
maintain our interim dividend at the same level as last year.
Business has generally been slow although property management
continues steadily with some further small mandates won.
As might be expected our investment business suffered during the
period. A number of good sales were successfully concluded but
there were no purchases.
Valuation instructions held up well although slightly below the
level in the same period last year. Rating continued to be
challenging but the outlook for the second half is more
optimistic.
Outlook
The Government's success in achieving a substantial overall
majority in the General Election has, at long last, removed the
major uncertainty of Brexit, although there remain difficult
negotiations ahead on the terms of our future relationship with
Europe.
Although uncertainties over the exact terms of our withdrawal
from Europe will potentially impact decisions in the commercial
property market, we expect both tenants and investors to be more
positive in their decision making.
Asset management is likely to continue to provide a steady
income flow and we are hopeful of securing further new instructions
in the coming months.
We have some investment sales instructions that should come to
fruition before the year end and we will look to acquire properties
for our inhouse clients.
Assuming the banks continue to lend on property, we expect a
reasonable flow of valuation instructions.
Rating income will continue to be influenced by the willingness
of the Valuation Office to engage in Rating Appeals. We have a
number of significant appeals in the pipeline and we would hope to
get a percentage of those agreed during the second half of the
year.
Although the political climate is now clearer, it remains hard
to predict the final outcome for the rest of the year and our
previously stated views on the difficulty in maintaining
profitability remain.
DAVID FLETCHER
CHAIRMAN
20 December 2019
Fletcher King Plc
Consolidated Interim Statement of Comprehensive Income
for the 6 months ended 31 October 2019
6 months 6 months
ended ended Year ended
31 October 31 October 30 April
2019 2018
(Unaudited) (Unaudited) 2019 (Audited)
GBP000 GBP000 GBP000
------------------------------------- ------------- --- ------------- --- ---------------
Revenue 1,331 1,465 3,053
Employee benefits expense (664) (786) (1,648)
Depreciation expense (138) (2) (3)
Other operating expenses (447) (591) (1,218)
Other operating income 36 45 91
------------- --- ------------- --- ---------------
Operating profit 118 131 275
Finance income 5 1 7
Finance expense (15) - -
------------- --- ------------- --- ---------------
Profit before taxation 108 132 282
Taxation (25) (28) (52)
------------- --- ------------- --- ---------------
Profit for the period 83 104 230
------------- --- ------------- --- ---------------
Other comprehensive income
Items that will not subsequently
be reclassified to profit or
loss:
Fair value gain on financial
assets through other comprehensive
income 95 - -
Total comprehensive income for
the period 178 104 230
------------- --- ------------- --- ---------------
Earnings per share (note 4)
- Basic 0.90p 1.13p 2.50p
- Diluted 0.90p 1.13p 2.50p
Dividends per share
Interim dividend proposed 1.00p 1.00p -
Dividends paid 0.75p 0.75p 1.75p
Fletcher King Plc
Consolidated Interim Statement of Financial Position
as at 31 October 2019
31 October 31 October 30 April
2019 2018 2019
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
-------------------------------- ------------- ------------- -----------
Assets
Non-current assets
Property, plant and equipment 7 10 9
Right-of-use asset 680 - -
Financial assets 1,698 1,603 1,603
Deferred tax assets 16 16 16
2,401 1,629 1,628
Current Assets
Trade and other receivables 963 823 1,809
Cash and cash equivalents 2,149 2,277 2,001
3,112 3,100 3,810
Total assets 5,513 4,729 5,438
Liabilities
Current liabilities
Trade and other payables 477 482 1,204
Current taxation liabilities 49 71 24
Lease liabilities 314 - -
Total current liabilities 840 553 1,228
Non current liabilities
Lease liabilities 392 - -
Shareholders' equity
Share capital 921 921 921
Share premium 140 140 140
Investment revaluation reserve 95 - -
Reserves 3,125 3,115 3,149
Total shareholders' equity 4,281 4,176 4,210
Total equity and liabilities 5,513 4,729 5,438
Fletcher King Plc
Consolidated Interim Statement of Changes in Equity
for the 6 months ended 31 October 2019
Investment Profit
Share Share revaluation and TOTAL
capital premium reserve loss EQUITY
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ ------------- ------------- ------------ ------- -------
Balance at 1 May 2019 921 140 - 3,149 4,210
Adjustment on initial
application of IFRS 16
(net of tax) - - - (38) (38)
Adjustment balance as
at 1 May 2019 921 140 - 3,111 4,172
Profit for the period - - - 83 83
Fair value gain on financial
assets through other
comprehensive income - - 95 - 95
Equity dividends paid - - - (69) (69)
------------------------------- ------------- ------------- ------------ ------- -------
Balance at 31 October
2019 (Unaudited) 921 140 95 3,125 4,281
=============================== ============= ============= ============ ======= =======
Balance at 1 May 2018 921 140 - 3,080 4,141
Total comprehensive income
for the period - - - 104 104
Equity dividends paid - - - (69) (69)
------------------------------- ------------- ------------- ------------ ------- -------
Balance at 31 October
2018 (Unaudited) 921 140 - 3,115 4,176
=============================== ============= ============= ============ ======= =======
Balance at 1 May 2018 921 140 - 3,080 4,141
------------- ------------- ------------ ------- -------
Total comprehensive income
for the period - - - 230 230
Equity dividends paid - - - (161) (161)
------------------------------- ------------- ------------- ------------ ------- -------
Balance at 30 April 2019
(Audited) 921 140 - 3,149 4,210
=============================== ============= ============= ============ ======= =======
Fletcher King Plc
Consolidated Interim Statement of Cash Flows
for the 6 months ended 31 October 2019
6 months 6 months
ended ended Year ended
31 October 31 October 30 April
2019
2019 (Unaudited) 2018 (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------------------------------- ----------------- ----------------- -----------
Cash flows from operating
activities
Profit before taxation from
continuing operations 108 132 282
Adjustments for:
Depreciation expense 138 2 3
Finance income (5) (1) (7)
Finance expense 15 - -
----------------- ----------------- -----------
Cash flows from operating
activities
before movement in working
capital 256 133 278
Decrease/(increase) in trade
and other receivables 794 94 (892)
(Decrease)/increase in trade
and other payables (680) (495) 226
----------------- ----------------- -----------
Cash generated/(absorbed)
from operations 370 (268) (388)
Taxation paid - - (70)
----------------- ----------------- -----------
Net cash flows generated from/(used
in) operating activities 370 (268) (458)
------------------------------------------- ----------------- ----------------- -----------
Cash flows from investing
activities
Purchase of financial assets - (15) (15)
Finance income 5 1 7
Net cash flows from investing
activities 5 (14) (8)
------------------------------------------- ----------------- ----------------- -----------
Cash flows from financing
activities
Principal element of lease
payments (143) - -
Finance expense (15) - -
Dividends paid to shareholders (69) (69) (161)
----------------- ----------------- -----------
Net cash flows from financing
activities (227) (69) (161)
------------------------------------------- ----------------- ----------------- -----------
Net increase/(decrease) in
cash and cash equivalents 148 (351) (627)
Cash and cash equivalents
at start of period 2,001 2,628 2,628
----------------- ----------------- -----------
Cash and cash equivalents
at end of period 2,149 2,277 2,001
Fletcher King Plc
Explanatory Notes
1. General information
The Company is a public limited company incorporated and
domiciled in England and Wales. The address of its registered
office is 61 Conduit Street, London W1S 2GB.
These interim financial statements were approved by the Board of
Directors on 19 December 2019.
2. Basis of preparation
The interim financial information in this report has been
prepared using accounting policies consistent with IFRS as adopted
by the European Union. IFRS is subject to amendment and
interpretation by the International Accounting Standards Board
(IASB) and the International Financial Reporting Standards
Interpretations Committee and there is an ongoing process of review
and endorsement by the European Commission. The financial
information has been prepared on the basis of IFRS that the
Directors expect to apply for the year ended 30 April 2020.
Except as described below, the accounting policies applied by
the Group in this interim report are the same as those applied by
the Group in the consolidated financial statements for the year
ended 30 April 2019.
Changes in significant accounting policies
The Group has initially adopted IFRS 16 Leases from 1 May 2019.
Under the transition methods chosen, comparative information is not
restated. The effect of adopting the standards in respect of prior
years is recognised as an adjustment to opening equity as at 1 May
2019.
The changes to the accounting policies for leases and the effect
of initially applying the new standards are mainly attributed to
the following:
- Recognition of right use of assets and lease liabilities for former operating leases
- Recognition of depreciation of the right use asset and an
interest charge in place of operating lease charge in the income
statement
The changes in accounting policies are also expected to be
reflected in the Group's consolidated financial statements as at
and for the year ending 30 April 2020.
A number of other new and amended standards and interpretations
are effective from 1 May 2019 but they do not have a material
effect on the Group's financial statements.
3. Non Statutory Accounts
The financial information for the period ended 31 October 2019
set out in this interim report does not constitute the Group's
statutory accounts for that period. Whilst the financial figures
included in this interim report have been computed in accordance
with IFRS, this interim report does not contain sufficient
information to constitute an interim financial report as that term
is defined in IAS34. The statutory accounts for the year ended 30
April 2019 have been delivered to the Registrar of Companies. The
auditors reported on those accounts; their report was unqualified,
did not contain a statement under either Section 498(2) or Section
498(3) of the Companies Act 2006 and did not include references to
any matters to which the auditor drew attention by way of
emphasis.
The financial information for the 6 months ended 31 October 2019
and 31 October 2018 is unaudited.
Fletcher King Plc
Explanatory Notes
4. Earnings per share
6 months 6 months Year ended
to 31 October to 31 October 30 April
2019 2018 2019
Number Number Number
Weighted average number of shares
for basic earnings per share 9,209,779 9,209,779 9,209,779
Share options - - -
--------------- --------------- ------------
Weighted average number of shares
for diluted earnings per share 9,209,779 9,209,779 9,209,779
=============== =============== ============
GBP000 GBP000 GBP000
--------------- --------------- ------------
Earnings for basic and diluted earnings
per share: 83 104 230
=============== =============== ============
Basic earnings per share 0.90p 1.13p 2.50p
Diluted earnings per share 0.90p 1.13p 2.50p
=============== =============== ============
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END
IR FFIFMUFUSEFE
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December 20, 2019 02:00 ET (07:00 GMT)
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